Hello and welcome back to the Wise Accounting Podcast. I cannot believe how many people have requested we re-introduce this over the past year, so, yes, after popular demand, we are back! Rather than catch up on the tax news that has occurred over the past year, we will just kick it off with the latest news, which for January is a surprisingly good dose.
     
    MYEFO
     
    There is good news afoot for the government (albeit potentially a little too late) with the mid-year economic and fiscal outlook improving from a deficit of $5.2b in 2018/19 to a surplus of $4.1b in 2019/20. <https://www.budget.gov.au/2018-19/content/myefo/index.html>
     
    Some of the measures that re set to improve this position include:
     
    Tax debt information disclosure — a 2016/17 MYEFO measure proposed to allow the ATO to disclose to Credit Reporting Bureaus the tax debt information of businesses with tax debt of more than $10,000 and who have not effectively engaged with the ATO to manage these debts. The measure will be amended to limit the disclosure to businesses with a tax debt of more than $100,000. The start date of the measure will also be changed from 1 July 2017 to the day after assent of amending legislation.
     
    Tax measures not proceeding
    The government confirmed that it will not proceed with the following measures:
    • self-assessment of the effective life of acquired intangible assets that are depreciating assets, and
    • income tax rate cuts for companies with an aggregated annual turnover of $50m or more.
     
    Superannuation
     
    Superannuation guarantee obligations — employers who fail to come forward during the 12-month superannuation guarantee amnesty and are subsequently caught will face an increased minimum penalty of 100% of the superannuation guarantee charge (increased from 50%). The amnesty period began on 24 May 2018 although the legislative amendments to enact the amnesty are yet to become law.
     
    Cash payment limit — the 1 July 2019 start date for the proposed 2018 Budget measure to introduce an economy-wide cash payment limit of $10,000 will be revised to 1 July 2020
     
    The government has invited individuals, businesses and community groups to submit their views regarding priorities for the 2019/20 Budget. The closing date for submissions is Friday, 1 February 2019.
     
    There has also been (long overdue) significant reviews undertaken to the superannuation system, undertaken by the Producitvity Commission.  The Commission identified a number of issues to be addressed, including prevalent high fees, unintended multiple accounts, chronic underperformance of certain funds and lack of competition in the default fund system. The final report makes 31 recommendations to the government to address these issues by modernising the system (increased from the 22 recommendations made in a draft report released in May 2018).
     
    While there have obviously been significant developments in the tax system since our last broadcast, these latest developments are certainly encouraging with a bright economic outlook, and employees set to gain increased protection from ASIC / APRA / ATO, while the trustees will have increased scrutiny and responsibilities.
     
    Until next week, thanks for tuning in to the Wise Accounting Podcast.

Wise Accounting Podcast

Tax News 15th January 2019

Stay up to date with this weeks tax news, hosted by Tyler Wise.

Tax News 22nd January 2019

As we anticipated, with a short week, and it being January, there is not a huge amount to discuss on the tax news front. However, having said that, it is worth noting that the sharing economy is still in the ATO sights, with the data matching consultation paper open until February 22nd. If you operate your business as an Uber driver, Airbnb host, or anything that derives income from a private asset, you should listen in to understand just what the ATO are up to.

As an added bonus this week Tyler discusses some of the 'common mistakes' he sees from clients in January, which follows on from the Post Christmas Guilts article he wrote earlier this month. Do not overreact to a downturn that occurs in December and January, if it is reflective of years past.

Listen in and enjoy. As always, any queries, comments or suggestions can be emailed direct to podcast@wiseaccounting.com.au and one of our team will be in touch.

WAP041 Tax News 29th January 2019

This episode is a bit of a 'mini-sode' due to the current tax news being significant in nature, specifically the release of the (503 page) Banking Commission Report; of which the Government has agreed to action all 76 recommendations.

Adding to this is the finalisation of the ATO guideline on tax residency of foreign companies. While this may seem extremely niche driven, due to the opening of Australia to some larger companies and simplification due to the "Amazon" tax, the implications will be wider than previously.

Ultimately this episode is a preceding episode to what will be a detailed review of the guideline released and the Banking Commission report.

As always, if you have any queries, please do not hesitate to reach out to the team podcast@wiseaccounting.com.au and we'll gladly reply to your queries or suggestions.

WAP042 Tax News 11th February 2019

We're back! And the reason being is that we have only 4 more days left (apparently) of Parliament sitting days, until the election. Exciting, nervous, lots of things in between, but it does have a tax implication too. What this means is that the $25,000 immediate asset write-off that was announced on 29th January will face an uphill battle to become legislation before parliament breaks. While Labor have supported this, I am unsure how much of a priority it will be. It is very much a watch this space and something we will continue to advise you as updates come to hand.

Tax Residency Reform

The incumbent Australia tax residency law, that has been unchanged since 1930 is being reviewed with the aim to modernise and simplify it. There have been several cases recently that have highlighted the absurdity of the old rules, and we can expect updates at some point in the future.

Updated Superannuation Rates

The ATO has published the key superannuation rates and thresholds for the 2019/20 year. Some of these rates and
thresholds have been indexed in accordance with the average weekly ordinary time earnings figures released by the
Australian Bureau of Statistics.
The key superannuation rates and thresholds include the following:
• concessional contributions cap — the concessional contributions cap is $25,000 for the 2019/20 year
• non-concessional contributions cap — the non-concessional contributions cap is $100,000 for the 2019/20 year
• CGT cap amount — the CGT cap amount for non-concessional contributions for 2019/20 is $1.515m
• Division 293 tax — the Div 293 tax threshold amount for 2019/20 is $250,000
• superannuation guarantee — the maximum super contribution base for 2019/20 is $55,270 per quarter
• superannuation co-contribution — the maximum superannuation co-contribution entitlement for the 2019/20 year
remains at $500. The lower-income threshold increases to $38,564 and the higher-income threshold increases to $53,564
for the 2019/20 year
• superannuation benefit caps — the low-rate cap amount for 2019/20 is $210,000. The untaxed plan cap amount for 2019/20
is $1.515m
• general transfer balance cap — the general transfer balance cap for 2019/20 is $1.6m
• defined benefit income cap — the defined benefit income cap for 2019/20 is $100,000
• employment termination payments (ETP) — the ETP cap amount for life benefit termination payments and death benefit
termination payments for 2019/20 is $210,000, and
• tax-free part of genuine redundancy payments and early retirement scheme payments — for genuine redundancy and
early retirement scheme payments for 2019/20, the base limit is $10,638 and for each complete year of service is $5,320.

We hope you have found this beneficial, and as always, if you have any queries, or feedback, please do not hesitate to reach out to the team at podcast@wiseaccounting.com.au

WAP043 Tax News 12 March 2019

Welcome to Episode 047 of the Wise Accounting Podcast. This week we discuss the latest developments including:
 - ATO lodgement and payment concessions to those affected by the bushfires in Australia.
 - The changes to Single Touch Payroll with the integration to the Child Support Agency
 - ATO increased data matching and how insurance companies may provide the key to the ATO taxing previously untaxed and unknown asset disposals.

A2 - 0001 AUDIO WAP047 Tax News 20Jan202000086400

I wanted to start with something I am passionate about, and glad to see the ATO cracking down on, and that is essentially widening the net in regards to illegal phoenix activities. For those of you that do not know, Phoenixing is essentially abandoning a company and then recommencing a similar company with similar stakeholders, but essentially your tax liabilities from the former company are neglected, and abandoned. Hence the term Phoenix, it is essentially a company that rises form the ashes of another. The benefit of a company is that the directors are protected by the corporate veil and generally are not personally liable for the liabilities of the company. This has changed in recent years, and the recently enacted Treasury Laws Amendment (combating Illegal Phoenixing) Act 2020 takes this further still.

What is new in this is act, which is already in effect, is that there are new phoenix offences, which essentially serve to prohibit creditor-defeating actions. This essentially prohibits any transfer of company assets for less than market value that would delay or hinder a creditors access to company assets in a liquidation. In the past essentially, it was only employees via superannuation obligation,s and the ATO, via director penalty notices that were protected. Any unsecured creditor was hung out to dry, with no affordable and effective recourse.

If a company officer is found guilty of these new offences, there are new criminal offences and civil provisions.

There is also a denial and restriction of backdating resignations. Typically a form can be submitted to ASIC outside of the 28 day lodgement obligation period, but a fine applies. Now however, these forms will essentially be denied, especially in situations where the company would be abandoned, that being, have no director at all. The director would only be able to resign from the date the form is reported to ASIC. Furthermore, abandonment of a company by a resigning director which would leave the company without any directors, is now prevented.

Furthermore, directors may become personally liable for the company’s GST liabilities. This is in addition to the existing director penalty regimes in respect of pay-as-you-go and superannuation liabilities. This is 100% a welcomed addition, as ensuring ALL liabilities can be met is part of the internal governance obligations of the company directors and officers.

Finally, the ATO now have the authority to retain tax refunds in certain situations, which allows the ATO to ensure that companies satisfy their tax obligations and pay outstanding amounts of tax before being entitled to a tax refund.

If you are a director of a company make sure you are compliant. I know it goes without saying, but the corporate veil is certainly thinner now than it was before February 18th.

The ATO has commenced an inquiry in to the tax treatment of employee share schemes. Based on my Linkedin feed this has certainly been welcomed by the accounting profession and what the committee will inquire is:

1. How effective the changes in 2015 have been in their goal of bolstering entrepreneurship in Australia and start-up companies.
2. The costs and benefits of these concessional taxation treatments and deferred taxing points for options, to the broader community.
3. Whether the current tax treatment of ESS remains relevant to start-up companies and whether any changes are appropriate to ensure that the taxation treatment remains relevant
4. How companies currently structure their ESS arrangements and how taxation treatment effects these decisions, and
5. The challenges faced by companies in setting up an ESS arrangmenet and how the standard documents introduced by the ATO in 2015 assist this process and whether additional improvements should be made.

WAP048 - Tax News 2nd March 2020

Government Stimulus Package (WAP 049)

Updated Stimulus Package (WAP050)

Wise Accounitng Podcast

Third Stimulus Package Tranche - WAP051

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